NEW YORK, April 11 (Reuters) - World equity markets rallied
for a fourth day on Thursday, lifted by a surprise drop in
Americans seeking unemployment benefits last week, while crude
fell on a cut in global demand forecasts as U.S. oil supplies
hit a two-decade high.

The larger-than-expected drop in U.S. jobless claims came as
world equities markets rose on continued support from Japan's
aggressive monetary easing and signs of a growing recovery in
China.

Initial claims for state unemployment benefits dropped
42,000 to a seasonally adjusted 346,000, a drop that could ease
fears of a marked deterioration in U.S. labor market conditions
after a surprise stumble in job growth in March.

Wall Street mostly rose despite a drop in tech shares after
a 14 percent plunge in personal computer sales in the first
quarter, the sharpest drop in two decades of record-keeping.

The plunge marks a new milestone in the apparent ebbing of
the PC age as computing goes mobile via tablets and smartphones.

The Nasdaq fell and shares of Microsoft Corp, Intel
Corp, Apple Inc and Hewlett-Packard Co
were the four biggest decliners in the benchmark S&P 500, which
closed on Wednesday at an all-time high.

The Dow Jones industrial average was up 42.89 points,
or 0.29 percent, at 14,845.13. The Standard & Poor's 500 Index
was up 4.38 points, or 0.28 percent, at 1,592.11. The
Nasdaq Composite Index was up 0.13 points, or 0.00
percent, at 3,297.38.

Since the Bank of Japan unveiled its radical stimulus
program a week ago, the dollar has gained about 7 percent,
yields on major government bonds have fallen and MSCI's world
equity index has hit levels last seen in June 2008.

The latest gains in equities have been helped by evidence of
an economic recovery in China - notably signs of growing
domestic demand and easier credit - and by indications from the
European Central Bank last week that it may cut rates.

MSCI's all-country world index rose 0.6
percent, a day after posting its second-best gain of the year.

"The stronger-than-expected Japanese liquidity surge has led
us to reassess our views on risky assets," said Salman Ahmed,
fixed income strategist at Lombard Odier Investment Managers.

The benchmark 10-year U.S. Treasury note was up
4/32 in price to yield 1.7913 percent.

Brent crude oil fell below $105 per barrel, not far above an
eight-month low, after analysts cut forecasts for global oil
demand growth and U.S. crude oil stocks increased to their
highest level in more than two decades.

Brent futures were down 55 cents to $105.24 a
barrel. U.S. crude futures fell 28 cents to 94.36 a
barrel.

The dollar fell from a four-year high against the yen but
still looked to strengthen above the 100 level in the near term
as traders bet the Bank of Japan's aggressive monetary easing
will trigger further yen weakness.

The dollar was last down 0.35 percent at 99.41 yen,
having risen as high as 99.87 yen on Wednesday, the strongest
level since April 2009.